Dáil Éireann Debate, Thursday - 7 October 2004
173 Mr. Broughan asked the Minister for Communications, Marine and Natural Resources the steps he will take with regard to the escalation of costs in the fishing industry, especially the cost of marine diesel fuel. [23839/04]
View answerThe recent escalation of fuel costs as a result of global economic and political conditions is a matter of concern for all sectors of industry. The fishing industry is, however, exceptionally exposed to these increases because of the relatively high proportion of fuel costs to overall costs.
The fishing industry in Ireland and throughout the European Union receives favourable treatment in the form of a full rebate on excise and VAT on marine fuel, if the enterprise concerned is registered for VAT. However, there are strict EU rules in relation to public aid which state that "State aid which is granted without imposing any obligation serving the objectives of the Common Fisheries Policy on the part of the recipients" and which has the effect of reducing the recipient's production costs or improving the recipient's income is, as operating aid, incompatible with the common market. The Commission intends to apply this rule with rigour to all operating aid, including aid in forms of tax relief, or of reductions of contributions to social security or to unemployment benefit systems, and therefore is not permitted. Accordingly, the question of compensation to offset the costs arising from the increase in fuel prices does not arise.
In this specific situation, it is, therefore, not open to me to intervene. I will continue to keep the situation closely monitored and consider any proposals from industry that may help to alleviate the situation for fishermen and do not breach state aid rules.
